US New Labour Rule: 2 Or More Employers Controlling the Work - Karma Global
Spread the love

United States New Labour Rule: 2 Or More Employers Controlling the Work of the Same Employees – Is It Boon or Bane?!!!!


Karma Management has now become Karma Management Global Consulting Solutions Pvt. Ltd. which was incorporated in the year 2004 and has now completed almost 18 years of its existence.

As late as April 2021, Karma Global took a very bold step of venturing into foreign shores in terms of shoving up its business prospects in countries like the US, UK, UAE, Canada, the Philippines, and South East Asia.

It has already made its mark in terms of providing excellent services in the areas of payroll, outsourcing, recruitment and talent acquisition, facility management services, and regulatory compliances including employment contracts in these foreign countries as well.

In fact, the CVO and MD, Pratik Vaidya of Karma Global was selected by SME Forum earlier this year, to lead a Select US Summit where he took along a delegation of over hundreds of SME Members for business discussions with the authorities in the States as well as with the entrepreneurs and Innovators of many countries who were present in this forum.

A few months back, Pratik Vaidya, CVO & MD of Karma Management Global Consulting Solutions Pvt Ltd went on a Europe tour, participating along with Advantage Austria and brainstorming on the ecosystem of Start-ups in Salzburg, Austria

Karma Global thus entails the compliances of global clients in these countries as well, and in keeping with the global scenario, it does keep a very hard track of the status of global compliances all around the world and especially so, it keeps an update on what is happening around the universe as far as people, wages, work, benefits, employment contracts, negotiation, and unions are concerned across the globe.


Let Us Understand What This New Rule Is All About?

Background and what the Obama Administration did?

During the Obama administration, the Democratic majority at the NLRB first attempted to implement this expansive joint employer liability standard in its misguided 2015 Browning-Ferris (BFI) decision, which upended longstanding precedent. Until that decision, the NLRB had held that a putative joint employer must exercise direct and immediate control over the terms and conditions of employment. Under BFI, indirect or reserved control, even if not exercised, between two or more businesses could be enough to create a joint employment relationship.


The Year 2020 Scenario!!!!!!!

The Board 2020 then issued a joint employer final rule that elucidated a more straightforward standard stating that “an entity may be considered a joint employer of a separate employer’s employees only if the two share or codetermine the employees’ essential terms and conditions of employment,” such as wages, benefits, work hours, etc. In other words, control over those terms and conditions had to be exercised, not just held theoretically by a putative joint employer. The current proposal would rescind that 2020 rule and essentially reinstate a standard substantially similar to Browning-Ferris.


Occurrence During Trump Administration!!!!!!!

During the Trump administration, the Republican majority on the Board set about trying to rectify many of the policy shifts enacted by their predecessors. Now in the minority, the Republican members of the NLRB dissented from the current NPRM “because the proposed rule is fundamentally flawed and inconsistent with the common law and policies of the [NLRA].” 


What The Proposed Law Foretells!   

The National Labour Relations Board (NLRB) on September 6 issued a Notice of Proposed Rulemaking (NPRM) proposing to rewrite its standard for determining joint employment under the National Labour Relations Act (NLRA).

This proposal would reverse a rule-making on the same topic promulgated just over two and a half years ago and covers numerous commonplace business relationships that traditionally have not been considered joint employment, a legal situation in which two or more employers control the work or working conditions of the same employees.

The U.S. labour board on Tuesday moved to make it easier for workers and unions to hold companies liable for labour law violations by their franchisees and contractors, proposing to revive an Obama-era standard heavily criticized by trade groups.

The proposed rule from the National Labour Relations Board would treat companies as so-called “joint employers” when they have indirect control over working conditions such as scheduling, hiring and firing, and supervision.

Joint employment has been one of the most contentious labour issues for many U.S. businesses since the Obama administration when the NLRB had adopted a similar standard that trade groups said was unworkable and would curb franchising.

A rule adopted during the Trump administration requires that companies have “direct and immediate” control over contract and franchise workers in order to be considered joint employers. Tuesday’s proposal would rescind the 2020 rule, which was favoured by business groups.

The NLRB will formally publish the proposal on Wednesday, starting a 60-day public comment period. A final rule will likely be adopted next year.


What Some of the Officials Had to Say in This Regard!!

NLRB Chair Lauren McFerran, a Democrat, said in a statement that the proposed rule was necessary to safeguard workers’ rights to collectively bargain as employment relationships become increasingly complex.

A company that is found to be a joint employer would likely be forced to become more involved in setting and implementing workplace policies, and could be required to bargain with unions.


That would further complicate collective bargaining, making it more difficult for unions to negotiate contracts with businesses and undermining the NLRB’s stated goal of strengthening workers’ rights, said Glenn Spencer, a senior vice president at the U.S. Chamber of Commerce, the country’s largest business lobby.

Spencer in an interview said he expected legal challenges to the rule once it is finalized.

The rule, if enacted, would significantly restrict the freedom of many small business owners, said Elizabeth Milto, the acting executive director of the legal arm of the National Federation of Independent Business, a lobbying group.

“This decision could have the effect of taking away employment decisions from small independent franchisees and putting those decisions into the hands of large corporations,” Milto said.



NLRB proposal threatens to entangle countless franchise businesses……!

The new proposal would broadly affect industries such as manufacturing and construction that rely heavily on staffing agencies and contractors to provide workers, and franchises such as McDonald’s Corp that are not typically involved in franchisees’ day-to-day workplace issues.

While the concept of joint employment is not a new one, the struggle to implement a uniform standard to define it at the NLRB rests on seemingly pedantic differences in legal interpretation. However, depending on what standard prevails, the consequences could be significant for potential joint employers that may be held responsible for employees they don’t employ and for workplaces they do not actually control.

More importantly, the NLRB proposal threatens to entangle countless franchise businesses, government contractors, and any companies with significant supply chain relationships if they can exercise some degree of influence over the working conditions of another business’s employees. For those employers—not to mention their employees—that could mean negotiating with a labour union to reach a collective bargaining agreement involving multiple entities, which could spell disaster for them and potentially wider economic upheaval.

It has been stated that the proposed rule is sufficiently flawed that a decision to adopt it would be arbitrary and capricious” – an observation that sums things up rather negatively.

Earlier last month, we saw in Canada a beautiful thing to happen in the light of the Minister of Employment’s statement reproduced below:

“Everyone deserves to work in dignity, in safety, and in health. With these changes, the Canada Government is strengthening protections for temporary foreign workers. These individuals come to Canada and work for Canadian businesses, and help drive the Canadian economy forward. We have a responsibility to ensure they are protected and respected.”


The Government of Canada takes its responsibility to protect temporary foreign workers (TFWs) very seriously. Ensuring the health and safety of these workers while they are in Canada is a key priority, and the Government is taking concrete action to better support them.

Karma Global while dealing with all such issues and cases, always takes the approach to act trustworthily and to be compliant with the laws of the land.

Karma Global always advises its clients to be on the good side of the law and to abide by the same.  In this respect, it offers a plethora of excellent services in terms of documentation compliance and validity of licenses for running the business and also supports establishments and union-afflicted workers to take a just stand on issues, in the company’s interest and not on trivial grounds just for the sake of it, to show the level of aggression.

Respect for all fundamental principles and rights at work (FPRW), including freedom of association and the right to collective bargaining, is an essential foundation of the ILO and key to successful policy and decision-making. As the world of work is changing at an ever-increasing pace, strong, influential and inclusive social dialogue is, and will be, a key vehicle to shape the world of work that we want.

Karma Global’s integrated regulatory compliance services run on expert machinery that is agile and consistent and is simplified for the global clients in a manner that they can easily grasp the subject matter against the tangled complexity and risk, which gives the global clients the power of confidence and control.

Karma Global is well aware that the lengthening list of supranational regulations is a burden enough for any multinational business, while each jurisdiction implements its regime with its own unique local twists, creating a maze of localized regulations.

Also, it is universally known that compliance timelines are always tighter given the stipulated dates.  Sometimes simple oversights on the part of the employers can threaten to damage reputations and jeopardize operations and therefore, such Organizations like Karma Global make it a point to reach out to employers and establishments struggling with compliance in order to keep pace with them so that staying compliant and in good standing with the Government’s rules, across the entire operational footprints is made simpler and easy by Karma Global Tech Firm.

We have the reach and resources to be your global partner in regulatory compliance management, easily transforming all the regulatory uncertainties into clarity and control.

Our global regulatory health checks, conducted by our teams of local experts, can evaluate your current regulatory standing across every market and solve the country-specific challenges they find.

With our finger permanently on the regulatory pulse – monitoring supranational regulatory schemes and the innumerable pieces of local legislation that give them the force of law – we make sure there are no surprises.

We expertly classify, register, document, assess, review and report across all your regulatory obligations, leaving you free to focus on the business end.

Our deep, country-by-country knowledge, expressed through a 200 -strong network of local offices makes light work of the most intricate local and global reporting obligations.

For clients facing urgent one-off regulatory challenges – perhaps a major cross-border KYC exercise for a time-critical international deal – we can scale up quickly and easily thanks to a flexible structure and global resource base.


Proprietary blog of Karma Global Tech Management LLC

This blog has been collated and compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, for its monthly newsletter Issue 07 of January 2023 in case of specific or general information or compliance updates that matter, kindly reach out to the Marketing Team – /

Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »